Let the reforms continue...
The Tiger is on the hunt again! In case you didn’t guess, I am talking about our Prime Minister, Dr Manmohan Singh.
By implementing a slew of economic reforms, Dr Singh has tried to send across a message – that he is no lame duck head of the government, that he is no poodle of anyone, that he might have paused but is certainly not an underachiever and a tragic figure.
The response to all these adjectives, used by the foreign as well as Indian media, has come by way of action, and not words. And this is what counts.
The measures that have been announced include FDI in retail, diesel price hike, cap on LPG subsidy etc.
However, since good economics is bad politics, the measures led to Mamata Banerjee-led Trinamool Congress - the UPA’s second biggest ally - quitting both the government as well as the coalition (and a quid pro quo followed in West Bengal).
While the government has survived with outside support from the Samajwadi Party (SP) and the Bahujan Samaj Party (BSP), the big question on everyone’s mind is – can the UPA government maintain the momentum (of economic reforms) as well as survive?
The measures to revive the Indian economy, suffering from slow down and high inflation, are also aimed at repairing the image of the PM as well as the government, which has been accused of setting in policy paralysis due to coalition compulsions.
However, with his new found confidence, the PM seems to have outdone his allies this time around, at least for now. With TMC out and BSP and SP assuring their support, the UPA government can embark on a year-long journey of economic reforms.
For now the government has the numbers (around 310 in Lok Sabha) – of these, 254 are of UPA members and the rest of parties lending outside support. While the SP (22 MPs) and BSP (21) are adversaries in their home turf Uttar Pradesh, they both are keeping the UPA government alive at the Centre for specific reasons.
The BSP has just lost the Assembly Elections and a downfall of the Union government followed by the Lok Sabha elections would yield no benefit to the party that champions the Dalit cause.
For the SP, the BJP is a no go area and only a viable Third Front option would prompt Mulayam Singh Yadav to pull the plug and cause UPA government’s collapse. At present, the third alternative seems to be in tatters.
The BJP too has refrained from experimenting too much, restricting its tirade only to the extent of targeting the PM and the government. It still is unsure of its “wave” in the country and that is why it has decided against bringing a no confidence motion in Parliament, when it convenes.
Also, the principal opposition party probably wants to wait till the Assembly Elections in Gujarat and other states later this year or early next year to test its standing in political waters. A stupendous performance in the coming state polls could lead the BJP to go for the kill.
One reason for the BJP’s ‘low self confidence’ could be the fact that it criticises the government on every other issue, but doesn’t have alternate solutions and disallows debate in Parliament by stalling it. Although it has criticised the government on recent economic reform measures but the party hasn’t offered any alternative that can ensure greater GDP growth. Even BJP’s Arun Shourie, disinvestment minister in the erstwhile NDA government, has supported the diesel price hike and measures to curb fiscal deficit.
As put by many economic pundits and those from the industry, this bit of opportunity is probably the last for the Manmohan Singh government to rescue the country from heading into a recessionary mode.
Even Finance Minister P Chidambaram has admitted that the target of fiscal deficit, pegged at 5.1 percent this fiscal, may not be met. And it’s not hidden fact that a high, rising fiscal deficit coupled with ever rising subsidies bill is disastrous for the economy.
In the case of FDI in retail, there are accusations that the same has been allowed at the behest of foreign retailers and would lead to loss of livelihood for millions. It is possible that vested interests could have been at play in the decision on retail FDI and there might be truth in the accusations, but that should not deter the government from carrying on with reforms, which had been put on the backburner in the previous years for a while now.
Some have even defined the current measures as the boldest in over a decade.
While going forward with the reforms plan, the government should also focus on other measures like bringing back black money and curbing corruption in order to boost revenue and reduce fiscal deficit. It would not be right to penalise the common man for every misdeed of those in power and those who always find a way around the laws.
Collecting money from the pockets of the poor and the middle class and letting those with influence get away is not justified in any society, more so in the world’s largest democracy. The popular anti-corruption, Lokpal movement is a testament of the fact.
So, Manmohan is right in being bold, bring about change, carry on with reforms but also remember the much needed healing touch. Without care for the common man, economic reforms - however farsighted they may be - would never be effective in transforming the society.